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How Does Divorce Impact Estate Planning in Tennessee?
Revocation Laws, Trust Considerations, and Next Steps
By: Jennifer “Jenni” Chambers-Smith
The dissolution of a marriage is not only a significant life event emotionally — it also has a substantial impact on an estate plan. While there may be a sense of relief once a final decree is entered, important steps remain to ensure a former spouse is no longer included in key planning documents.
In Tennessee, individuals should not rely solely on statutory protections. While state law provides some safeguards, they are limited in scope. It is critical to proactively review and update estate planning documents — including wills, trusts, beneficiary designations, and powers of attorney — to ensure they reflect your current wishes.
Key Questions to Consider
After a divorce, individuals should revisit their estate plan with the following in mind:
- Can a former spouse still serve as executor or agent under a power of attorney?
- Does a former spouse remain a beneficiary of a trust?
- Are retirement account beneficiary designations to an ex-spouse automatically revoked?
Failing to address these questions can create confusion and, in some cases, lead to unintended outcomes.
How Revocation-Upon-Divorce Laws Work
Many states have adopted revocation-upon-divorce statutes. These laws are designed to act as “gap-fillers,” based on the assumption that most individuals would not want a former spouse to remain a beneficiary or decision-maker after divorce.
However, these laws vary widely from state to state. Differences may include:
- Scope: Some states apply revocation only to wills, while others extend it to trusts and other assets
- Trigger: Some require a final divorce, while others apply upon legal separation
- Assets covered: Treatment of retirement accounts, life insurance, and other non-probate assets differs significantly
Because of these variations, individuals should not assume their estate plan will automatically update itself after a divorce.
Tennessee Law: What It Covers (and What It Doesn’t)
Tennessee takes a more limited approach than many other states.
Under Tennessee law, divorce or annulment automatically revokes certain provisions in a will. Specifically:
- Gifts to a former spouse are revoked
- Powers of appointment granted to a former spouse are revoked
- Nominations of a former spouse as executor, trustee, conservator, or guardian are revoked
Unless the will states otherwise, the former spouse is treated as if they predeceased the testator, and assets pass to alternate beneficiaries. If the parties remarry, these provisions may be revived.
While this statute provides clarity, it is important to understand its limits. It primarily applies to wills and does not comprehensively address other key components of an estate plan.
For example, Tennessee law suggests that similar principles may apply to trusts, but this is not always straightforward, particularly with irrevocable trusts, where changes may not be possible regardless of intent. In these situations, courts may look to the individual’s intent and, in some cases, impose a constructive trust. However, relying on court intervention introduces uncertainty, additional cost, and potential delays.
Powers of Attorney
Powers of attorney are another important consideration.
- Health care powers of attorney: The appointment of a spouse as agent is automatically revoked upon divorce
- Financial powers of attorney: No automatic revocation applies
Because of this distinction, individuals should be sure to review and update both types of documents following a divorce.
Beneficiary Designations: A Critical Gap
One of the most significant gaps in Tennessee law involves beneficiary designations. Divorce does not automatically revoke beneficiary designations for:
- Life insurance policies
- Retirement accounts (such as IRAs)
- Annuities
- Payable-on-death or transfer-on-death accounts
As a result, these assets may still pass directly to a former spouse if the beneficiary designation is not updated, regardless of what a will or trust provides. This is a common and often unintended outcome.
When Federal Law Applies: ERISA Considerations
Even in states with broader revocation laws, federal law can override state rules in certain situations.
The Employee Retirement Income Security Act (ERISA) governs most employer-sponsored retirement plans and some life insurance policies. Under ERISA:
- Plan administrators must follow the plan documents, including the named beneficiary
- A former spouse may still receive benefits unless the designation is updated or a qualified domestic relations order (QDRO) provides otherwise
This means that, even if state law suggests a different result, the named beneficiary on file will typically control.
What This Means for You
For Tennessee residents, the combination of limited state law and federal preemption creates additional risk. Beneficiary designations, particularly for employer-sponsored plans, are especially vulnerable to being overlooked.
The takeaway is straightforward: updating your estate plan after a divorce is essential. This includes reviewing:
- Wills and trusts
- Powers of attorney
- Beneficiary designations across all accounts
Taking these steps can help ensure your assets are distributed according to your current wishes and reduce the likelihood of confusion, disputes, or unintended outcomes.
Jennifer “Jenni” Chambers-Smith and the Chambliss estate planning team are ready to assist you with evaluating and updating your estate plan after your divorce or annulment. Our team is available to ensure that swift action is taken so that your intended beneficiaries are not swept aside by out-of-date bequests and/or designations.
